U.S. seeks $80B for Iran war; debt strengthens bitcoin case

The Department of Defense told lawmakers it needs $80 billion to cover the war in Iran and a package of non-defense bills. Deputy Defense Secretary Stephen Feinberg relayed the request in phone calls to members of Congress earlier this week and said the amount is not limited to military spending.

The supplemental follows an earlier Pentagon proposal that exceeded $200 billion and faced pushback on Capitol Hill. Officials say the current request bundles the war cost with other items, including farm aid and disaster relief, and that a formal package could be presented to Congress within days. The conflict began in late February and is approaching four months in duration. In April Pentagon officials estimated the war’s direct cost at about $25 billion.

The request affects the federal fiscal picture. U.S. national debt has passed $39 trillion. Investors and some lawmakers point to rising deficits and the growing debt load when making the case for assets with fixed supply.

Senator Cynthia Lummis has linked bitcoin’s role to the nation’s fiscal trajectory. Economist Peter Schiff has warned that debt could reach about $50 trillion in coming years.

Market moves since the conflict began have added data to the debate. Analysts at JPMorgan recorded an initial bitcoin drop of roughly 8.5% on the first day of the fighting, followed by a recovery of about 11% from those lows. During the same period, gold and silver experienced outflows and periods of profit-taking, according to market analysts.

Supporters point to bitcoin’s rapid rebound and its continuous trading as characteristics that some investors see as useful in stressed markets. Critics note that bitcoin often moves with risk assets and that the sharp initial sell-off highlights its price volatility.

How Congress handles the supplemental will affect near-term borrowing needs. Lawmakers have asked the administration repeatedly for a full accounting of war costs. Approving a smaller package would reduce the immediate need for new borrowing, while approving the full request or delaying action would leave budget pressures unchanged or increased.

The timing of the request brings the fiscal debate into view ahead of the November midterm elections and could influence discussions about deficit levels and the financial backdrop that investors consider when allocating assets.